- August 17, 2023
- Concorde Investment Services
FINRA recently issued a sanction against Concorde Investment Services after it was alleged that the firm sold private placement offerings to investors with whom it did not have an existing relationship and who were not qualified to make those investments. Concorde Investment Services, LLC (CRD# 151604) has been a FINRA member since August 2010. The company’s main office is in Livonia, MI, and it serves customers with a team of 150 registered representatives working out of 60 branch offices.
Current Allegations Of Conduct
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA) in July 2023, FINRA issued a sanction to Concorde Investment Services that included a censure; a $175,000 fine; disgorgement of $58,278 in commissions received, plus interest; and an undertaking that, within 180 days of the date of the notice of acceptance of this A WC, a member of Respondent’s senior management who is a registered principal of the firm shall certify in writing that, as of the date of the certification, the firm has remediated the issues identified in these allegations and implemented a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with the Securities Act and FINRA rules related to general solicitation of private placement offerings.
The FINRA sanction alleges, “Between December 2020 and December 2021, Concorde served as a soliciting dealer for three separate private placement offerings. The firm sold securities to 45 prospective investors in those offerings without having established substantive relationships with the prospective investors prior to the firm’s participation in those offerings or otherwise demonstrating the absence of a general solicitation. As a result, each of those sales constituted an unregistered distribution of securities without an applicable exemption from registration. The sales totaled approximately $5.5 million, and the firm received $58,278 in commissions in connection with those sales.”
In addition, the sanction also alleges, “Concorde failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with the Securities Act and FINRA Rules regarding general solicitations.”
For a copy of the FINRA sanction, click here.
Concorde Investment Services has been the subject of two additional disclosures. For a copy of Concorde Investment Services’ BrokerCheck, click here.
We Help Investors Recover Investment Losses
Alternative investments are not regulated by the U.S. Securities and Exchange Commission (SEC), and are often subject to fraud and other schemes. Examples include commodities, hedge funds, real estate, derivatives contracts, private equity, managed futures, and venture capital. They are not typically regulated by the SEC, nor are they usually liquid or easy to value, which makes them risky investments. In addition, alternative investments are often open only to accredited investors with an income of $200,000 or more or a net worth in excess of $1M; they also require high up-front minimums. When these opportunities are opened to non-accredited investors, it may be because of unsuitability, fraud, selling away or misrepresentation, and the investor may incur losses.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the financial advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
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